Operation Hope CEO John Hope Bryant joined TheStreet to discuss how the economy is holding up.
Full Video Transcript Below:
CONWAY GITTENS: We hear all this negativity about the economy. Many people are worried about mortgage rates and interest rates. But you’re so bullish. And I’m wondering, what is this rational?
JOHN HOPE BRYANT: I’m not bullish. This is a radical movement of common sense. Look, when our parents were alive trying to get a mortgage, interest rates were in the teens. I mean, I mean, if you’re trying to get a mortgage when Carter was president or whatever, or after that, it was, you know, you might be looking at a 12%, 15%, 18% interest rate, a 5% interest rate, 6. And so what people say, well, John, we had 1% and 2%, it was free money. It was capitalism on crack. The government after where did that come from. The 2008 pandemic, which we saw come showdown right here in the stock exchange, where the economy froze up, imploded, rightly so, because of the mortgage crisis was bad capitalism the way it was done.
And the government had to lower interest rates to near zero and put a lot of stimulus in. They didn’t want to stop the party because every time they did it, the Wall Street would say, no, no, no, no, no, no. The pandemic was actually I say this respectfully, those who lost their life in the pandemic. Was the crisis big enough, incredible enough for interest rates, the Fed to raise interest rates because they knew they had to cool off hot money. Yet all this stimulus money pouring into the economy, we never had a stimulus bill in the trillions. We never. No government the world has ever had a stimulus with a T in front of it. And so we had almost 10 trillion. And so you had to raise interest rates to cool that down. But they’ve only raised it to 5. What I’m amazed with is that we’re still standing. We’re still standing. We’re doing well. Now we’re arguing over is inflation 3% or 4% and our interest rates 5% and 6% not are we still here.
CONWAY GITTENS: So where do you stand in this debate with the Fed. There are some people who say the economy is already slowing. They need to loosen up a bit. There are other people saying, hey, they need to just stay where they are right now and wait a couple more months and see what happens, especially since you’re in housing. I’m in multiple industries. What is your sense of where interest rates should be going and how fast should we get there?
JOHN HOPE BRYANT: So personally, I would love to see interest rates down a couple, a couple hundred, a couple basis points. But professionally and from an American perspective, I think Powell needs to keep some vigilance and maybe wait till later in the year. And I think we’re going to see one tick down. I don’t think it’s going to go up. I think we’ll see one tick down before the end of the year. He is looking at his legacy. I’m sorry. I think he’s looking at the long term and saying, what do I want my legacy to say. And you don’t want to be wrong about this. There’s two things you don’t want to be wrong around. You don’t want to be wrong about how much money to pour on a burning fire in the pandemic. So was there too much stimulus? Yes, about a trillion and a half dollars more than we needed. But you don’t want to be wrong about it. So a bipartisan Congress poured too much water on the fire to make sure it was out. But where’s the pandemic manual. I mean, where do you what do you pull that one off the shelf from a OK. 125-year-old pandemic, global economy. We pull that off. What do we do?
So it was you know, it was an overcorrection. Is he being cautious now? Yes. But you don’t want to get this wrong. And because where’s the lighthouse for the world. It’s not China. It’s not Russia. It’s not France or Germany. It’s America. So America is the biggest, strongest, most vigilant and resilient economy in the world. And we want to keep it that way, healthy. And I think that if the tax on that is he keeps interest rates higher than we’d like, longer than we’d like to make sure the economy, the inflation cools down. And by the way, for people who grew up in areas where you and I grew up, those table top economics, gas, food, whatever, as much, what are you going to do to get that under control. So the prices don’t keep spiraling, I think admirable assurance that’s going through the roof. Hello, car notes. I mean. I mean, car notes are like house notes these days.
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